BofA to Sell Biggest U.S. Pizza Hut Franchisee to Olympus

Nov. 7 (Bloomberg) -- Bank of America Corp. has agreed to
sell its stake in the biggest U.S. Pizza Hut franchisee for
about $775 million to Olympus Partners, said two people with
knowledge of the deal.

Bank of America will get about $400 million in proceeds
after the debt of NPC International Inc. is assumed, said the
people, who declined to be identified because the terms weren’t
publicly disclosed. The debt of the pizza business will be
repaid by the purchaser when the deal is completed, which is
expected by Dec. 28, according to a filing today from NPC.

Chief Executive Officer Brian T. Moynihan is concentrating
on retail and commercial banking while scaling back assets
acquired under his predecessor, Kenneth D. Lewis. The bank
inherited NPC in its 2009 takeover of Merrill Lynch & Co., which
bought the pizza purveyor in May 2006 for $615 million,
according to a filing. Moynihan, 52, is divesting private-equity
holdings that will require a greater cushion under new
international rules on capital.

“These deals are getting Bank of America to a place where
it’s a much simpler organization focused on the U.S. banking
consumer,” said Jefferson Harralson, an analyst at KBW Inc.
with a “market perform” rating on the lender. “A Pizza Hut
investment very clearly doesn’t fit in with where Brian is
taking the business.”

NPC was founded in 1962 and operates more than 1,100
eateries as of September. The Overland Park, Kansas-based
business accounts for about one-fifth of U.S. Pizza Hut
restaurants and its locations are spread across 28 states,
mostly in the Midwest and South, with about 26,000 employees.

Goldman Sachs, Barclays

The acquisition is expected to be financed by a credit
facility arranged by affiliates of Goldman Sachs Group Inc. and
Barclays Plc, which are advising Olympus. The restaurant
operator got advice from JPMorgan Chase & Co.

Jerry Dubrowski, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment on the transaction.

NPC had more than $370 million in long-term debt as of
Sept. 27, the company said today in its quarterly filing. Net
income in the 13 weeks ended Sept. 27 fell less than 1 percent
from a year earlier to $3.47 million as higher commodity costs
weighed on margins. Comparable store sales gained 0.4 percent.

Olympus Partners manages more than $3 billion for corporate
pension funds, endowments and state retirement funds, according
to the statement. The Stamford, Connecticut-based firm invests
in health-care, financial firms and consumer businesses.

Private Equity

Bank of America has accelerated asset sales amid concern
that the lender, which has lost about half its market value this
year, will be overwhelmed by losses tied to soured mortgages.
While Moynihan has said repeatedly that the bank will reach
capital targets by selling assets deemed less important to
clients, rather than selling stock, the bank said last week it
may issue 400 million shares as it retires preferred securities.

Bank of America agreed in September to sell its stake in
U.S. hospital operator HCA Holdings Inc., another asset acquired
by Merrill Lynch’s private-equity arm in 2006. Bank of America
had $3 billion in proceeds from that investment, including
dividends and a March initial public offering, the firm said.

In August, the bank announced deals to divest a Canadian
credit-card unit for C$7.5 billion ($7.4 billion) and sell about
half its stake in China Construction Bank Corp., the world’s
second-biggest lender by market value, for $8.3 billion in
proceeds.

Bank of America, the second-largest U.S lender by assets,
dropped 12 cents to $6.37 at 12:05 p.m. in New York.